Abstract :

This study aims to analyze the impact of Sharia inclusion and financial ratios on the stock performance of companies listed in the SRI-Kehati Index during the period 2014-2019. The SRI-Kehati Index reflects companies committed to socially and environmentally responsible investment. Using panel data regression methods, this study evaluates how financial ratios such as the DAR , P/E , and ROE  affect stock prices. Macroeconomic variables like Gross Domestic Product (GDP) and inflation are used as control variables. The results indicate that being Sharia-compliant doesn’t significantly impact stock prices. Similarly, the DAR didn’t have a significant effect. On the other hand, the return-on-equity ratio had a positive significant impact on stock prices, showing that good management and strong financial health boost investor confidence and market performance. Conversely, the P/E ratio had a negative significant impact, likely because high P/E ratios raise concerns about overvaluation and the sustainability of high stock prices relative to earnings.

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Keywords :

DAR, financial ratios, P/E, ROE, Sharia Inclusion, SRI-Kehati Index, Stock Performance.

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